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Notes1 CB PDF
Notes1 CB PDF
MODULE- I INTRODUCTION TO THE CB: Definition: CB behaviour refers to the actions and decision processes of people who purchase goods and services for personal consumption.- James F Engel, Roger D Blackwell and Paul Miniard. The mental and emotional processes and the physical activities of people who purchase and use goods and services to satisfy particular needs and wants- Bearden et al. The behaviour that consumers display in searching for, purchasing, using, evaluating and disposing of, if products and services that they expect will satisfy their needs.- Leon G Schiffman and Leslie Lazar Kanuk Selected Consumer Behaviour Roles: Role Initiator Gatekeeper Influencer Description Initiator is the individual who determines that some need or want is not being fulfilled and authorises a purchase to rectify the situation. Influences the familys processing of information. The gatekeeper has the greatest expertise in acquiring and evaluating the information. Influencer is a person who, by some intentional or unintentional word or action, influences the buying decision, actual purchase and/or the use of product or service. The person or persons who actually determine which product or service will be chosen. Buyer is an individual who actually makes the purchase transaction. User is a person most directly involved in the use or consumption of the purchased product.
The diversity of CB: Human being differs from one to another. It is not easy to predict the human behaviour. Human being differs in their taste, needs, wants and preferences. But one constant thing is that we all are consumers. CB is a vast and complex subject. Understanding CB and knowing consumers are not that simple. It is almost impossible to predict with one hundred per cent accuracy, how consumer(s) will behave in a given situation. Marketers are interested in watching people shopping, flirting, parading, playing, entertaining, as they are keenly interested in the wide variety of behaviours they display. The efforts of all marketers are to influence the behaviour of consumers in a desired manner. The success or failure in this pursuit determines the difference between success and failure of marketing efforts or even the business itself.
Why we study of CB: The term CB is defined as the behaviour that consumers display in searching for, purchasing, using, evaluating and disposing of products and services that they expect will satisfy their needs. CB focuses on how individuals make decisions to spend their available resources (time, money, effort) on consumption related items. The term CB describes two different kinds of consuming entities: the personal consumer and the organizational consumers. The Personal consumer buys goods and services for his or her own use, for the use of the household or as a gift for a friend. In each of these contexts, individuals, who are referred to as end users or ultimate consumers, buy the products for fine use. The second category of consumer- the organizational consumer- includes profit and not-for-profit businesses, government agencies (local, state, and national), and institutions (e.g. Schools, hospitals, and prisons), all of which must buy products, equipments and services in order to run their organization. Why the field of CB developed: In order to succeed in any business, and especially in todays dynamic & rapidly evolving market place, marketers need to know everything they can about consumers what they want, what they think, how they work, how they spend their leisure time. The field of CB is rooted in the Marketing concept. Production concept Product concept Selling Concept Marketing concept- CB developed from this concept. Here everything is executed from the point of view of Consumer.
Ethics of Marketing & Corporate Environment: No environmental degradation- less promotion for tobacco & drug- the societal marketing concept requires that all marketers adhere to principles of social responsibility in the marketing of their goods & services. According to the societal marketing concept, fast-food restaurants should develop foods that contain less fat and starch and more nutrients, and marketers shouldnt advertise alcoholic beverages or cigarettes to young people, or use young models or professional athletes in liquor or tobacco advertising. Some critics are concerned that an in-depth understanding of CB makes it possible for unethical marketers to exploit human vulnerabilities in the market place and engage in other unethical marketing practices in order to achieve individual business objectives. As a result, many trade associations have developed industry wide code of ethics. Business School Education: Consumers also stand to benefit directly from orderly investigations of their own behaviour. This can occur on an individual basis or as part of more formal educational programs. As we study what has been discovered about the behaviour of others, we can gain insight into out own interactions 3
with the marketplace. For example, when we learn that a large proportion of the billions spend annually on grocery products is used for impulse purchases, and not spent according to pre-planned shopping lists, we may be more willing to plan our purchases in an effort to save money. In general, as we discover the many variables that can influence consumers purchases. We have the opportunity to understand better how they affect our own behaviour. What is learned about consumer behaviour can also directly benefit consumers in a more formal sense. The knowledge can serve as data for the development of educational programs designed to improve consumers decision-making regarding products and services. Such courses are now available at the high school and college level and are becoming increasingly popular. To be most effective, these educational programs should be based on a clear understanding of the important variables influencing consumers. Consumer Movement: Marketing evolved through production concept to marketing concept. And marketing concept is nothing but consumer-oriented approach. Until company satisfy the needs and wants of consumer the whole efforts to bring the product in the market fails. Companies had to engage in extensive marketing research to identify unsatisfied consumer needs. In this process, marketers learned that consumers were highly complex as individuals had very different psychological and social needs, quite apart from their survival needs. They also discovered that needs and priorities of different consumer segments differed significantly. They realised that to design products and develop suitable marketing strategies that would satisfy consumer needs, they had to first study consumers and the consumption related behaviour in depth. In this manner, market segmentation and marketing concept paved the way for the application of consumer behaviour principles to marketing strategy. Consumer Research: (A) Consumer researchers today use two different types of RM to study CB (i) Quantitative Research: It is also known as positivism researchers are known as positivist. The research methods used in positivist research are borrowed primarily from the natural sciences and consist of experiments, survey techniques and observation. The findings are descriptive, empirical and, if collected randomly (using a probability sample) can be generalized to larger population. Qualitative Research: It is also known as interpretivism. Researchers are also known as interpretivists. Among the RM they use are depth interviews, projective techniques, and other methods borrowed from cultural anthropology. Broadly speaking, the findings of qualitative research cannot be generalized to large population.
(ii)
Marketers have discovered that these two research paradigms are really complementary in nature. The prediction made possible by positivist research together produce a richer and more robust profile of consumer behaviour than either research approach used alone.
(B) The consumer research process: Steps in Consumer Research Process: Consumer Research Objective Secondary Data Collection Sufficient Insight No Yes Prepare report
Prepare report
Prepare report
(i)
A carefully thought out statement of objectives helps to define the type and level of information needed. Is it to find out consumer attitudes about online shopping? To determine what percentage of households e-mail? 5
(ii)
Internal sources: P&L statement, balance sheets, sales figure, and prior research report. External sources: Govt publication, periodicals and books & commercial data. (iii) Designing primary research:
Quantitative research designs: Three Basic RD used here are Observational Research: OR is an important method of consumer research because marketers recognize that the best way to gain an in-depth understanding of the relationship between people & product is by watching them in the process of buying and using products. Many large corporations and advertising agencies used trained researchers/observers to watch note & sometimes videotape consumers in stores, malls or their own homes. Mechanical observation like security cameras in ATM counter to observe problems customer may have in using ATMs. Experimentation:
The best example is shopping mall; we can judge the consumers inside about how long respondents spend in looking at the product, the time spent in examining each side of the package, the products purchased, and the order of the purchases. Surveys:
If researchers wish to ask consumers about their purchase preferences and consumption experiences they can do so in person, by mail, by telephone or online through questionnaire. Qualitative RD & Data Collection Method: Depth Interview:
It is a lengthy (generally 30mnts to an hour) non-structured interview between a respondent and a highly trained interview between a respondent and a highly trained interviewer. Respondents are encourages to talk freely about their activities, attitudes and interest to the product category or brand under study.
Focus Group:
Consists of 8 to 10 respondents who meet with a moderator-analyst for a group discussion focussed on a particular product or product category. Respondents are encouraged to discuss their interests, attitudes, reactions, motives, life styles, feelings about the product or product category, usage experience and so forth.
Projective Techniques:
Designed to tap the underlying motives of individuals. They consist of a variety of disguised tests that contain ambiguous stimuli, such as in complete sentences, untitled pictures or cartoons, work association test. (i) Thematic Apperception Test (TAT): respondents are shown pictures or cartoons concerning the product or the topic under study and asked to describe what is happening in the picture. It is believed that respondents will actually reveal their own motivations, attitudes, personalities and feelings about the situations. (ii) Word Association Test: This is a relatively old and simple technique. Respondents are read a series of words or phrases, one at a time and asked to answer quickly with the first word that comes into mind after hearing each one. By responding in rapid succession, it is assumed that they indicate what they associate most closely with the word or phrase spoken and reveal their true feelings. (iii) Sentence Completion Test: The interviewer reads the beginning of a sentence and the respondent is required to finish it. This technique is believed to be useful in uncovering the images consumers have about products and stores. The information collected can be used to develop promotional campaigns. (iv) The Third Person Technique: The interviewer asks the respondent to describe a third person. For this, respondents are presented with some information about the person. It is believed that when they describe a neighbour or a third person, they usually respond without hesitation and in doing so, they express their own attitudes or motives as they infer the attitudes or motives of someone else. (iv) Sampling & data collection:
Probability sampling Non-probability sampling. (v) Data analysis and reporting research findings:
In qualitative research, the moderator or test administrator usually analyses the responses received. In quantitative research, the researcher supervises the analysis. (vi) Report Preparation:
In both qualitative & quantitative research, the research report includes a brief executive summary of the findings. Depending on the assignment from marketing management, the research report may or may not include recommendations for marketing action. The body of the report includes a full description of the methodology used and for quantitative research, also includes tables and graphics to support the findings. A sample of the questionnaire is usually included in the appendix to enable management to evaluate the objectivity of the findings.
Consumer needs and Motivation: Motivation: Basic drive in the individual, which enable a man to act in a particular way, called motivation. Learning Unfull-filled Needs Tension Drive
Cognitive Process
Behaviour
Need Satisfaction
Tension Reduced
Needs: Every individual has needs. Innate Needs: Physiological (food, water, air, clothing, shelter, sex). It is called primary needs also. Acquired Needs: We learn in response to our culture or environment. Self-esteem, prestige, affection, power, learning. Because, acquired needs are generally psychological. They are considered secondary needs. Goals: Goals are the sought-after results of motivated behaviour. If a person tells his parents the he wants to get a graduate degree, he has stated a generic goal. If he says he wants to get a graduate degree, he has stated a generic goal. If he says he wants to get an MBA degree from CMRIT then he has expressed a product specific goal. The goals selected by individuals depend on their personal experiences, physical capacity, prevailing cultural norms and values and the goals accessibility in the physical and social environment. Positive & Negative Motivation: We may feel a driving force toward some object or condition or a driving force, which takes away from some object or condition. For example, a restaurant to fulfil a hunger need, and away from motorcycles transportation to fulfil a safety need. Some psychologists refer to positive drives as needs, wants or desires and to negative drives as fear or aversion.
Rational Vs Emotional Motives: Consumer behaviourists say that consumers behave rationally by carefully considering all alternatives and choosing those that give them the greatest utility. In a marketing context, the rationality implies that consumers select goals based on totally objective criteria, such as size, weight, price etc. Emotional motives imply the selection of goals according to personal or subjective criteria (e.g. pride, fear, affection or status). The Dynamics of Motivation: Motivation is a highly dynamic construct that is constantly changing in relation to life experiences. Needs and goals change & grow in response to an individuals physical condition, environment, interaction with others, and experiences. As individuals attain their goals, they develop new ones. If they dont attain their goals they continue to strive for old goals or they develop substitute goals. Frustration: Failure to achieve a goal often results in feeling s of frustration. The barrier that prevents attainment of a goal may be personal to the individual (e.g. limited physical or financial resources) or an obstacle in the physical or social environment (e.g. a storm that causes the postponement of a long-awaited vacation) regardless of the cause; individuals react differently to frustrating situation. Some substitute goals. And some follow other defence mechanism. Defence Mechanisms: When needs are not satisfied then you get frustrated. Even you set the substitute goals then also at the initial stage, there will be frustration. Aggression: throwing rotten tomato to players after defeating. Rationalisation: Failed in exam, as I have not studied well. Regression: Childish behaviour, spill ink on shirt in show room. Projection: Blame on something else or some one else. Autism: Unrealistic psychological thinking based on emotions. Marketer in advtg, e.g. Sprays, perfumes, denim, uses it. Withdrawal: You expect that within one year, you will get promotion, if you dont get then leave the job. Identification: I dont get promotion then identify that X has got promotion because of some close link up with management. Repression: If you cant achieve then you forget that once you had such desire.
Arousal of Motives: Physiological Arousal: A decrease in body temperature will induce shivering, which makes the individual aware of the need for warmth. Secretion of sex hormones will awaken the sex need. For example, a person who is cold may turn up the heat in his bedroom and also make a mental note to buy a warm cardigan sweater to wear around the house. Emotional Arousal: Sometimes day dreaming results in the arousal or stimulation of latent needs. People who are bored or who are frustrated in trying to achieve their goals often engage in day dreaming (autistic thinking) in which they imagine themselves in all sorts of 9
desirable situations. A young woman who daydreams of a torrid romance may spend her free time in Internet. Cognitive Arousal: Sometimes random thoughts can read to a cognitive awareness of needs. An advertisement that provides reminders of home might trigger instant yearning to speak with ones parents. This is the basic for many long-distance telephone company campaigns that stress the low cost of internationals long-distance rates. Environmental Arousal: The set of needs an individual experience at a particular time are often activated by specific cues in the environment. Without these cues, the needs might remain dormant. For example, the 6 clock news, the sight or smell of bakery goods, fastfood commercial on television, the end of school day- all of these may arouse the need for food. Types & Systems of Needs: For many years, psychologists and others have attempted to develop a comprehensive list of motives. Most authorities agree about specific physiological needs but there is marked disagreement about specific psychogenic or secondary needs. Henry Murray (1938) prepared a list of 28 psychogenic motives. He believed that everyone has the same basic set of needs. What differs among individuals is that they attach different priority and ranking to these needs. Some important psychogenic motives pointed out by Murray include acquisition, achievement, recognition and exhibition, which are believed to play an important role in consumer behaviour. (i) Murrays List of Psychogenic Needs:
Needs associated with inanimate objects: Acquisition, Conservancy, Order, Retention, Construction. Needs that reflect ambition, power, accomplishment, and prestige: Superiority, Achievement, Recognition, Exhibition, Inviolacy (inviolate attitude), Infavoidance (to avoid shame, failure, humiliation, ridicule), Defendance (defensive attitude), Counteraction (counteractive attitude) Needs concerned with human power: Dominance, Deferrence, Similance (suggestible attitude), Autonomy, Contrariance (to act differently from others) Sadomasochistic Needs: Aggression, Abasement Needs concerned with affection between people: Affiliation, Rejection, Nurturance, Succorance (to seek aid, protection, or sympathy), play. Needs concerned with social intercourse (the needs to ask and tell): Cognizance (inquiring attitude) Exposition (expositive attitude) 10
(iii)
SelfactualisationSelffulfilments
Safety & Security needs: Protection, order, and stability Physiological needs: Food, air, shelter, sex
The Measurement of Motives: How are motives identified? How are they measured? How do researchers know which motives are responsible for certain kinds of Behavior? These are different questions to answer because motives are hypothetical constructs that is- they cant be seen or touched, handled, smelled, or otherwise tangibly observed. For this reason no single measurement method can be considered a reliable index. Instead, researchers usually rely on a combination of various qualitative research techniques to try to establish the presence and/or the strength of various motives. Motivational Research:
The concept of motivation research has been offered as a means of identifying consumers true, underlying purchase motives. The term is typically not used to describe just any type of research on motivational issues. It refers to certain research techniques and, to some extent, ways of interpreting information about motivation generated by this technique. (i) The development of Motivational Research: Sigmund Freuds psychoanalytic theory of personality provided the foundation for the development of motivational research. This theory was built on the premise that unconscious needs or drives- especially 11
biological and sexual drives are at the heart of human motivation and personality. Freud constructed his theory from patients recollections of early childhood experiences, analysis of their dreams, and the specific nature of their mental and physical adjustment problems. Dr. Ernest Dichter, formerly a psychoanalyst in Vienna, adapted Freuds psychoanalytical techniques to the study of consumer buying habits. Up to this time marketing research had focused on what consumers did (i.e., quantitative, descriptive studies). Dichter used qualitative research methods to find out why they did it. Marketers were quickly fascinated by the glib, entertaining, and usually surprising explanations offered for consumer behaviours, especially since many of these explanations were grounded in sex. For example, marketers were told that cigarettes and Lifesaver candies were bought because of their sexual symbolism. By the early 1960s, however, marketers realized that motivational research had a number of drawbacks. Because of the intensive nature of qualitative research, samples necessarily were small; thus, there was concern about generalizing findings to the total market. Also, marketers soon realized that the analysis of projective tests and depth interviews was highly subjective. The same data given to three different analysts could produce three different reports, each offering its own explanation of the consumer behaviour examined. Critics noted that many of the projective tests that were used had originally been developed for clinical purposes rather than for studies of marketing or Consumer Behavior. (ii) Evaluation of Motivational Research: Despite its criticisms, motivational research is still regarded as an important tool by marketers who want to gain deeper insights into the whys of CB than conventional marketing research techniques can yield. Since motivational research often reveals unsuspected consumer motivations concerning product or brand usage, its principal use today is in the development of new ideas for promotional campaigns, ideas that can penetrate the consumers conscious awareness by appealing to unrecognised needs. Motivational research also provides marketers with a basic orientation for new product categories and enables them to explore consumer reactions to ideas and advertising copy at an early stage to avoid costly errors. Furthermore, as with all qualitative research techniques, motivational research findings provide consumer researchers with basic insights that enable them to design structured, quantitative marketing research studies to be conducted on larger, more representative samples of consumers.
Consumer Modelling: Definition of a Model: A model can be defined as a simplified representation of reality. It simplifies by incorporating only those aspects of reality that interest the model builder. Other aspects that are not of interest only add to the complexity of the situation and can be ignored. Thus an architects model of a building may not how furniture arrangements if that is not important to the buildings design. Similarly, in modelling consumers we should feel free to exclude any aspects that are not relevant to their 12
Behavior. Since we have defined consumer Behavior as involving a decision process, models that focus on this process will be of considerable interest to us. Types of Models: Any given property or process can be modelled in a variety of ways. We could model something by verbally describing it, by representing it with diagrams or mathematical symbols, or by characterizing it with some physical process such as electrical current. The most common consumer-behavior models are verbal, often supported by a schematic drawing. Consumer-behavior models can also be classified in terms of scope. Some are designed to represent a very specific aspect of behavior, such as consumers repetitive purchasing of the same brand over a period of time. Others are much more comprehensive because they attempt to include a great variety of consumer behaviours. These comprehensive models are less detailed in nature so that they can represent many diverse situations. Use of Models Models are devised for a variety of reasons, but the two purposes for developing most consumer models are (1) to assist in constructing a theory that guides research on consumer behavior and (2) to facilitate learning what is presently known about consumer behavior. In both cases the model serves to structure systematic and logical thinking about consumers. The Economic Model: In this model, consumers follow the principle of maximum utility based on the law of diminishing marginal utility. The consumer wants to spend the minimum amount for maximising his gains. Economic Man model is based on: Price effect: Lesser the price of the product, more will be the quantity purchased. Substitution effect: Lesser the price of the substitute product, lesser will be the utility of the original product bought. Income effect: When more income is earned, or more money is available, more will be the quantity purchased. This model, according to behavioural scientists is, not complete as it assumes the homogeneity of the market, similarity of buyer behaviour and concentrates only on the product or price. It ignores all the other aspects such as perception, motivation, learning, attitudes, personality and sociocultural factors. It is important to have a multi-disciplinary approach, as human beings are complex entities and are influenced by external and internal factors. Learning Model: This model is also named as Pavlovian learning model after the Russian Physiologist Ivan Pavlov. He experimented on a dog and observed how it responded on the call of a bell and presenting it with a piece of meat. The responses were measured by the amount of saliva secreted by the dog. Learning is defined as the changes in behaviour, which occur by practice and, based on previous experience. This is important to marketers as well. 13
Drives: This is a strong internal stimulus, which impels action. Because of the drive, a person is stimulated to action to fulfil his desires. Can be innate which stem from physiological needs, such as hunger, thirst, pain, cold, sex, etc. Learned drive, such as striving for status or social approval. Responses are what the buyer does, i.e. buys or does not buy. Reinforcement Thus when a person has a need to buy, say clothing, and passes by a showroom and is attracted by the display of clothing, their colour and style, which acts a stimulus, and he makes a purchase. He uses it, and if he likes it, enforcement takes place and he is happy and satisfied with the purchase. He recommends it to his friends as well, and visits the same shop again. Learning part, thus is an important part of buyer behaviour and the marketer tries to create a good image of the product in the mind of the consumer for repeat purchases through learning. Psychoanalytical model: Psychologists have been investigating the causes, which lead to purchases and decision-making. A.H. Maslow has answered this in his hierarchy of needs. The behaviour of an individual at a particular time is determined by his strongest need at that time. The behaviour of an individual at a particular time is determined by his strongest need at that time. This also shows that needs have a priority. First they satisfy the basic needs and then go on for secondary needs. Motivational forces govern the purchasing process and behaviour. Motivation stimulates people into action. Motivation starts with the need. It is a driving force and also a mental phenomenon. Need arises when one is deprived of something. A tension is created in the mind of the individual, which leads him to a goal directed behaviour, which satisfies the need. Once a need is satisfied, a new need arises and the process is continuous. 5. Self- actualisation: Self- fulfillment 4. Ego Needs: Prestige, Status, Success, Self-respect etc
3. Social Needs: Affection, Friendship, Belonging, etc. 2. Safety and Security Needs: Protection, Order Stability, etc.
Sociological model: This is concerned with the society. A consumer is a part of the society and he may be a member of many groups in a society. These groups influence his behaviour. Primary groups of family friends and close associates exert a lot of influence on his buying. A consumer may be a member of a political party where his dress norms are different. As a member of an elite organisation, his dress requirements may be different, thus he has to buy things that conform to his lifestyles in different groups. The Howard Sheth Model: This model is slightly complicated and shows that consumer behaviour is a complex process and concepts of leaning; perception and attitudes influence consumer behaviour. This model of decision-making is applicable to individuals. It has four sets of variables, which are: (i) (ii) (iii) (iv) Input Perceptual and Learning constructs Outputs Exogenous or external variables
Input: Some inputs are necessary for the customer for making decisions. (a) Significance stimuli: These are physical tangible characteristics of the product. These are price, quality, distinctiveness, services rendered and availability of the product. These are essential for making decisions. (b) Symbolic stimuli: These are the same as significative characteristics, but they include the perception of the individual, i.e. price is high or low. Quality is up to the mark or below average. How is it different from the other products, what services can the product render and, what is the position of after sales service and how quickly or easily is the product available and, from where. Social stimuli: This is the stimulus provided by family, friends, social groups, and social class. This is important, as one lives in society and for the approval and appreciation of the society, buying habits have to be governed. Perceptual and Learning Constructs These constructs are psychological variables, e.g. motives, attitudes, perception which influence the consumer decision process. The consumer receives the stimuli and interprets it. Two factors that influence his interpretation are stiulus-ambiguity and perpetual bias. Stimulus ambiguity occurs when the consumer can not interpret or fully understand the meaning of the stimuli he has received, and does not know how to respond. Perceptual bias occurs when an individual distorts the information according to his need and experiences. 15
Learning Constructs Perceptual Constructs Motives attitudes perception which influences decision making process (psychological variables) Intention
Outputs Purchase
Inputs
Intention
Overt Search
Confidence Attitude
Attitude
Symbolic stimuli Quality Price Distinctiveness Service Availability
Motive
Stimulus Ambiguity
Brand Comprehension
Brand Comprehension
Choice Criteria
Attention
Perceptual Bias
Satisfaction
Attention
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These two factors influence the individual for the comprehension and rating of the brand. If the brand is rated high, he develops confidence in it and finally purchases it. Output By output we mean the purchase decision. After purchase there is satisfaction or dissatisfaction. Satisfaction leads to positive attitude and increases brand comprehension. With dissatisfaction, a negative attitude is developed. The feedback shown by the dotted line and the solid lines shows the flow of information. Exogenous or external variables These are not shown in the model, and do not directly influence the decision process. They influence the consumer indirectly and vary from one consumer to another. These are the individuals own personality traits, social class, importance of purchase and financial status. All the four factors discussed above are dependent on each other and influence the decision-making process. The model though complicated, deals with the purchase behaviour in an exhaustive manner. The Engel-Kollat-Blackwell Model: It consists of four components: (i) (ii) (iii) (iv) Information processing Central control unit Decision process Environmental influences
Information processing: It consists of exposure, attention, comprehension and retention of the marketing and non-marketing stimuli. For successful sales the consumer must be properly and repeatedly exposed to the message. His attention should be drawn, such that he understands what is to be conveyed and retains it in his mind. Central control Unit: The stimuli processes and interprets the information received by an individual. This is done by the help of four psychological factors. (a) Stores information and past experience about the product, which serves as a standard for comparing other products and brands. (b) Evaluative criteria, which could be different for different individuals. Attitudes or the state of mind, which changes from time to time, and helps in choosing the product. (d) The personality of the consumer, which guides him to make a choice suiting his personality. 17
Information Processing
Stimuli
Exposure
Attention
Comprehension
F I L T E R
Evaluative Criteria
P E R S O N A L I T
Attitude
Retention
Problem Recognition
Hold
Internal Search & Alternative Evaluation
External Search
Information Feedback
Hold
External Search & Alternative Evaluation
Outcomes
Post-purchase Evaluation
Further Behavior
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Decision Process It consists basically of problem recognition, internal and external search, evaluation and the purchase. The decision outcome or the satisfaction and dissatisfaction is also an important factor which influences further decisions. The decision process may involve extensive problem solving, limited problem solving or routinised response behaviour. This depends on the type and value of the product to be purchased. Environmental influences The environmental influences are also shown in a separate box and consist of income , social class, family influences, social class and physical influences and other considerations. All these factors may favour or disfavour the purchase decisions.
MODULE III Determinants of CB: Consumer Imagery & perceived Risk: Perception: It is the individual process. It is the process by which we attach meaning s to the happening in the environment. It may be reality or reality itself. Steps: i. ii. iii. Selection: Selecting the stimuli. Organizing: Similar things group together Interpretation: Here individuality comes in the process.
Sensation: It is the immediate & direct response of the sensory organs to stimuli. A stimulus is any unit of input to any of the senses. Examples of stimuli (i.e., sensory input) include products, packages, brand names, advertisements, and commercials. Sensory receptors are the human organs (the eyes, ears, nose, mouth and skin) that receive sensory inputs. Their sensory functions are called into play, either singly or in combination, in the, in the evaluation and use of most consumer products. The absolute thresh hold: The lowest level at which an individual can experience a sensation is called the absolute threshold. The point at which a person can detect a difference between something and nothing is that persons absolute threshold for that stimulus. To illustrate the distance at which a driver can note a specific bill board on a highway is that individuals absolute threshold. 19
As our exposure to the stimulus increases, we notice it less in the field of perception, the term adaptation refers specifically to getting used to certain sensation; that is, becoming accommodated to a certain level of stimulations. Sensory adaptation is a problem that concerns many national advertisers, which is why they try to change their advertising campaigns regularly. They are concerned that consumers will get so used to their current print ads and TV commercials that they will no longer see them; that is , the ads will no longer provide sufficient sensory input to be noted. Example: Some print ads include a lot of empty space in order to accentuate the brand name or product illustration, and some TV ads use silence, the absence of audio sound , to generate attention. The differential Threshold: The minimal difference that can be detected between two similar stimuli is called the differential threshold or the JND. Manufacturers and marketers endeavour to determine the relevant JND for their products for two different reasons: i. ii. So that negative changes (e.g. reductions in product size or quality, or increases in product, price) are not readily discernible to the public (they remain below the JND) and So that product improvements (such as improved or updated packaging, larger size or lower price) are very apparent to consumers without being wastefully extravagant (i.e., they are at or just above the JND)
Subliminal Perception: People are also stimulated below their level of conscious awareness; that is they can perceive stimuli without being consciously aware that they are doing so. Stimuli are beneath the threshold. Consumer Imagery Consumers have a number of enduring perceptions, or images that are particularly relevant to the study of consumer Behavior. Products and brands have symbolic value for individuals, who evaluate them on the basis of their consistency with their personal pictures of themselves. We know about the consumer self-images and how consumers attempt to preserve or enhance their selfimages by buying products and patronizing services that they believe are congruent with their selfimages and by avoiding those that are not. The following section examines consumers perceived images of products, brands, services, prices, product quality, retail stores, and manufacturers. i. Product Positioning: The essence of successful marketing is the image that a product has in the mind of the consumer- that is, its positioning. Positioning. Positioning is more important to the ultimate success for a product than are its actual characteristics, although products that are poorly made will not succeed in the long run on the basis of image alone.
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Positioning conveys the concept, or meaning, of the product or service in terms of how it fulfils a consumer need. A good positioning strategy should have a two-pronged meaning: one that is congruent with the consumers needs while, at the same time, featuring the brand against its competition. For example, the classic 7-Up slogan The Un-Cola was designed to appeal to consumers desire for an alternative to the most popular soft drink (by using the prefix un), while also elevating the product by placing it in the same league with its giant competitor (by using the word cola). Umbrella positioning: This strategy entails creating an overall image of the company around which a lot of products can be featured individually. This strategy is appropriate for very large corporations with diversified product lines. For example, Mc Donalds positioning approaches over the years include You deserve a break today at Mc Donalds, Nobody can do it like McDonalds can, and Good times, great taste. Positioning Against the Competition: You will find it between Pepsi and coco cola. Positioning based on a specific Benefit: Pizza Hut anywhere service within 30 mints. Filling several position Positioning of services: Compared with manufacturing firms, service marketers face several unique problems in positioning and promoting their offerings, because services are intangible images becomes a key factor in differentiating a service from its competition. Thus the marketing objective is to enable the consumer to link a specific image with a specific brand name. Many service marketers have developed strategies to provide customers with visual images and tangible reminders of their service offerings. These include delivery vehicles painted in distinct colour, restaurant matchbooks, packaged hotel soaps and shampoos and a variety of other speciality items. Perceived Price: How a consumer perceives a price as high, as low, as fair- has strong influences on both purchase intentions and purchase satisfactions. Consider the perception of price fairness, for example, there is some evidence that customer do pay attention to the prices paid by other customers (such as senior citizen, frequent flyers, affinity club members), and that the differential pricing strategies used by some marketers are perceived as unfair by customers not eligible for the special prices. No one is happy knowing that he or she paid twice as much for an airline ticket or a theatre ticket as the person in the next seat. Perceived Quality: Consumers often judge the quality of a product or service on the basis of a variety of informational cues that they associate with the product. Some of these cues are intrinsic to the product or service, whereas others are extrinsic. Either singly or in composite, such cues provide the basis for perceptions of product & service quality Perceived quality of products: 21
ii.
Intrinsic cue: Size, colour, flavour, and physical characteristics. Extrinsic cue: Packaging, pricing, advertising and even peer pressure. Perceived quality of services: Difficult to evaluate, e.g., in evaluating a doctors services people note the quality of the office and examining room furnishing, the number of framed degrees on the wall. Perceived Risk: It is defined as the uncertainty that consumers face when they cannot foresee the consequences of their purchase decisions, regarding what products or services to buy and where to buy them. (i) Types of Risk: (ii) Functional Risk: the product will not perform well. Physical Risk: Risk the product may pose. E.g., radiation of cell phone. Social Risk: Poor product choice may cause social embarrassments (hair cut) Time Risk: Time spent on searching for product is waste if dont perform well.
Perception of Risk:
Consumer perception of risk varies, depending on the person, the product, the situation &culture. The amounts of risk perceived depend on the specific consumer. Some can take high risk and some cannot. How consumer handle risk: Consumer seeks information. Consumers are brand loyal. Consumers select Brand Image. Consumers rely on store image. Consumers buy the most expensive model.
Consumer Innovativeness and Personality Traits: Marketing practitioners try to learn all they can about consumer innovators- those who are likely to be the first to try new products, services, or practices for the market response of such innovators is often a critical indication of the eventual success of failure of a new product or service. Personality traits that have been useful in differentiation between consumer innovators and noinnovators include consumer innovativeness, dogmatism, social character, need for uniqueness, optimum stimulation level, sensation seeking and variety-novelty seeking. Consumer Innovativeness: Consumer researchers have endeavoured to develop measurement instruments to gauge the level of consumer innovativeness, because such personality trait measures provide important insights into the nature and boundaries of a consumer innovativeness to innovate. Recent consumer research indicates a positive relationship between innovative use of the Internet and buying online. 22
Dogmatism: Consumer responses to distinctively unfamiliar products or product features are of keen interest to many marketers, especially marketers of technologically rich products. Dogmatism is a personality that measures the degree or rigidity (versus openness) that individuals display toward the unfamiliar and toward information that is contrary to his or her own established beliefs. A person who is high dogmatic approaches the unfamiliar defensively and with considerable discomfort and uncertainty. At the other end of the spectrum, a person who is low dogmatic will readily considers unfamiliar or opposing beliefs. Consumers who are low in dogmatism (open-minded) are more likely to prefer innovative products to established or traditional alternatives. In contrast, highly dogmatic (closed-minded) consumers are more likely to choose established, rather than innovative, product alternatives. Social Character: The personality trait known as social character has its origins in sociological research, which focuses on the identification and classification of individuals into distinct sociocultural types. As used in consumer psychology, social character is a personality trait that ranges on a continuum from inner-directedness to other directedness. Inner-directed consumers tend to rely on their own inner values or standards in evaluating new products and are likely to be consumer innovators. Conversely, other-directed consumers tend to look to others for direction on what is right or wrong; thus, they are less likely to be consumer innovators. Need for Uniqueness: The research revealed that when consumers are asked to explain their choices, but are not concerned about being criticized by others, they are more receptive to making unique choices. Sample items from a Consumers Need for Uniqueness (NFU) Scale: I collect unusual products as a way of telling people Im different. When dressing, I have sometimes dared to be different in ways that others are likely to disapprove. When products or brands I like become extremely popular, I lose interest in them. I avoid products or brands that have already been accepted and purchased by the average consumer.